GrainCorp to boost U.S. malt output, target craft beer boom

SYDNEY May 19 (Reuters) - Australian agribusiness GrainCorp
Ltd plans to nearly double output capacity at one its
U.S. malt plants to capitalise on soaring North American demand
for craft beer.

Typically produced by small, local brewers, the popularity
of craft beers has grown rapidly in recent years in the United
States as drinkers seek new tastes, with sales estimated to have
climbed more than a fifth in 2014.

GrainCorp on Tuesday said it would spend $75 million to
increase production capacity at its Great Western Malting
facility in Pocatello, Idaho by 120,000 tonnes to 220,000
tonnes.

The move comes a few days after Australia's largest listed
agribusiness said it was looking to diversify internationally,
curbing the potential impact of the recently emerged El Nino
weather event that could reduce wheat production in the
company's stronghold across Australia's east coast.

"The craft sector in the United States has been growing
consistently at 10-15 percent per annum over recent years," said
Mark Palmquist, GrainCorp's managing director and chief
executive officer.

U.S. sales of craft beer in 2014 were worth nearly $20
billion, according to U.S. industry body the Brewers
Association, up more than 22 percent from the previous year and
accounting for nearly a fifth of all beer sold in the country.

That contrasts sharply with U.S. sales of traditional beer
products, which have seen little growth in the last 12 months.